A fixed asset with a cost of $41,000 and accumulated depreciation of $36,000 is traded for a similar asset priced at $50,000 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,000, at what cost will the new equipment be recorded in the books?
A) $54,000
B) $45,000
C) $51,000
D) $50,000

Question

Quizplus · Accepted Answer

The new equipment will be recorded at its fair market value, which is $50,000.

A Fixed Asset with a Cost of $41,000 and Accumulated